BNP, Santander, Barclays rank as best on financed CO2 emissions

illuminem summarizes for you the essential news of the day. Read the full piece on Financial Post or enjoy below:

🗞️ Driving the news: BNP Paribas (see sustainability performance), Banco Santander, and Barclays rank as the top banks for financed CO2 emissions, according to Bloomberg Intelligence
• Only 28 of the 53 largest global banks have set financed-emissions reduction targets aligned with the IEA’s net zero by 2050 roadmap
• European banks lead the way, benefiting from stricter EU regulations on climate risk

🔭 The context: Financed emissions track the carbon footprint of banks’ lending and investments in carbon-intensive industries
• In 2023, lending to oil and gas fell 41%, but analysts expect financing to rebound as fossil fuel companies recover
• EU regulations require banks to assess environmental risks, with the European Central Bank able to impose fines for non-compliance

🌍 Why it matters for the planet: The divergence between EU and US regulations on climate risk highlights a split in global financial approaches to sustainability
• Stricter European policies push banks toward lower-carbon investments, while US banks lag behind in emissions reduction commitments
• The shift in financed emissions could significantly influence corporate sustainability transitions

⏭️ What's next: NatWest and National Australia Bank are emerging as future leaders in emissions reductions
• NAB’s loans to high-carbon industries make up just 1% of its portfolio, far below the peer average of 33%
• Banks without exclusion policies for fossil fuel financing may see emissions increase as industry cash flows improve

💬 One quote: “Regulations and political pressures are diverging massively between the EU and the US, resulting in completely diametrically opposing pressures on banks.” — Grace Osborne, BI analyst

📈 One stat: BNP Paribas has a BI Carbon Score of 8.96, significantly higher than JPMorgan Chase (6.29) and Bank of America (5.16)

See here detailed sustainability performances of BNP Paribas, Banco Santander, Barclays, Bloomberg L.P, National Australia Bank, and NatWest

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